The simple interest on a certain principal for 3 years at an annual rate of 8% is equal to half the compound interest earned on Rs. 4000 over 2 years at 10% per annum. What is the principal amount on which simple interest is calculated?

Explanation

The simple interest for 3 years at 8% per annum on the unknown sum equals half the compound interest on Rs. 4000 at 10% per annum for 2 years. By calculating the compound interest first, then halving it, and equating it to the simple interest formula, we find the principal amount to be Rs. 1750.